Stock Picker Flying With Defense Stocks

Four-star fund manager Peter Klein says it's time for stock market investors to put some money into aerospace and defense.

His Fifth Third All Cap Value Fund is up an average of 7.74 percent per year over the last five years.

"For the kind of stocks that I'm recommending, you have an outsourcing play," he told CNBC. "These companies have to consolidate, and they have to source out a lot of their internal maintenance operations, inventory operations, so I'm looking for that to continue."

Recommendations:

His first pick isAAR.

"It's a billion-dollar sales company...posting pretty strong earnings," he explained. "Unfortunately, it's got caught in a crossfire with all the FAA grounding of planes because of inspections. Although they've had strong growth, there's a fear that's going to be reduced."

He also likes Teleflex.

"This is a multi-industry play, about 25 percent in aerospace, in terms of engine repair, but the big theme here is that this company has had a transformational acquisition," he said. "Fifty percent of its earnings are going to be coming from the medical area."